1. Q&E 6.8 Project 1 Maintenance costs: $ 750 + $ 150 per yr. = $ 900 per yr Need to calculate present value of stream of future costs:

2. S = 900 per yr r = 8% (.08) n = 30 yrs

3. Project 2 Capital cost (present) = $10,000 Maintenance costs: $ 800 every 5 yrs Need to calculate present value of each future cost:

4. Yr of costDiscount factorCostDiscounted 01/(1.08)^ 0 = 110000.00 51/(1.08)^ 5 = 0.68058800.00544.47 101/(1.08)^ 10 = 0.46319800.00370.55 151/(1.08)^ 15 = 0.31524800.00252.19 201/(1.08)^ 20 = 0.21455800.00171.64 251/(1.08)^ 25 = 0.14602800.00116.81 301/(1.08)^ 30 = 0.09938800.0079.50 11535.17